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Economy & Finance
Economic affairs in Cyprus are dominated by
the division of the country into the southern (Greek) area
controlled by the Cyprus Government and the northern Turkish
Cypriot-administered area.
Both North Cyprus and South Cyprus have Trade
Unions. Addresses and contact information is provided.
The Greek Cypriot economy is prosperous but highly susceptible
to external shocks. Erratic growth rates in the 1990s reflect
the economy's vulnerability to swings in tourist arrivals,
caused by political instability on the island and fluctuations
in economic conditions in Western Europe. Economic policy
in the south is focused on meeting the criteria for admission
to the European Union. As in the Turkish sector, water shortage
is a growing problem, and several desalination plants are
planned.
The Turkish Cypriot economy has about one-fifth the population
and one-third the per capita GDP of the south. Because it
is recognized only by Turkey, it has had much difficulty arranging
foreign financing, and foreign firms have hesitated to invest
there. The economy remains heavily dependent on agriculture
and government service, which together employ about half of
the work force. Moreover, the small, vulnerable economy has
suffered because the Turkish lira is legal tender. To compensate
for the economy's weakness, Turkey provides direct and indirect
aid to tourism, education, industry, etc.
There are many reputable accounting
firms and insurance
agents located all over Cyprus, but mainly concentrated
around the cities.
There are several major banks
in all the main cities in Cyprus, several with English speaking
staff and ATM machines.
A liberal economic system has been adopted in the TRNC. Under
this system the promotion of the private sector with limited
government intervention, the rational use of natural resources,
the encouragement of investments that generate high value
added and employment preserve their priority and importance.
The Republic of Cyprus has a liberal market economy. The country's
international competitiveness as a business location is to
be enhanced and geared towards EU membership, above all by
promoting the financial markets, liberalizing public services
and reducing public regulation.
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